Vietnamese textile manufacturers are seeing orders decline as buyers are moving to other, cheaper developing countries. Orders have shifted to emerging countries in Africa, while competition with textile superpowers like China, India and Bangladesh is becoming increasingly fierce. Even China’s orders are being transferred to countries with preferential tariff rates such as Bangladesh and Cambodia.

Many businesses do not have enough orders for 2020. Some have had a 20 per cent drop in orders from last year. Contracts for products have been monthly or quarterly rather than long term. Not only Vietnamese textile and garment producers, but also its fiber industry is facing increasing competition from foreign businesses and rivals in countries such as India, Thailand and Indonesia.

The US-China trade war and the new free trade agreements were expected to help Vietnam increase its textile exports but that has not really happened. The slowdown in global economy has affected consumer demand and Vietnamese enterprises have failed to adopt radical solutions to comply with FTAs’ rules of origin. Other difficulties being faced by Vietnam’s textile industry include rising costs of raw materials from China and lower prices demanded by foreign buyers. Vietnam is losing its low labor cost edge over other countries.